In just a few weeks, Singapore has gone from being one of the world's most expensive places for Internet access to one of its cheapest -- thanks to a price war playing out among several leading members of Singapore Inc.

The battle among these erstwhile friends to win Singaporeans and influence their online habits is getting hot. The latest salvo sees Pacific Internet (PacNet), which views itself as the funky, independent and entrepreneurial local Net brand, effectively paying users to visit its e-commerce sites. This (expensive) rocket was launched just days after it said it was slashing online charges by 70%. And only a week before that, PacNet's main competitor, SingNet, announced it was introducing a free dial-up service.

The trigger for this flurry of discounting: StarHub, which recently launched its own free dial-up service. In the space of just two weeks, StarHub says it has signed up more than 100,000 subscribers. While PacNet and SingNet initially spluttered that much of StarHub's subscription base represented dual account holders and that they were not losing subscribers, their subsequent actions show that they're concerned. SingNet subscribers number around 240,000, while PacNet claims about 200,000.

It's unclear who will triumph. But one thing seems clear: PacNet is vulnerable. The content on its sites is uninteresting; you can access it at maximum speed of only 56K (and let's be honest, few dial-up modems operate at the speed they claim); and at the end of the day Singapore is a limited market. PacNet's CEO Nicholas Lee needs to do more than merely buy small ISPs around the region to justify the company's longer-term existence.

Moreover, PacNet's competitors -- SingNet and StarHub -- are backed by two of the republic's biggest and best-connected companies: Singapore Telecom (SingNet) and Singapore Technologies (StarHub). Both are run by members of Senior Minister Lee Kuan Yew's family, and each includes the government among its major shareholders.

And there are better technologies out there. SingTel's ADSL-based access service, Magix, is far faster than PacNet's. And lurking in the wings is Singapore Cable Vision, the cable TV operator that now covers the island and is test-marketing cable-enabled Net access, which is faster still.

To be sure, the Sembawang group, which controls Pacific Internet, has had a good run. It made millions off the ISP when it became the first Asian Net play to list on New York's NASDAQ. It put up not one but two share offerings, the first in January at $17 a share and the second a few months later at a fully priced $51. Both issues were fully subscribed and the price has held up, spurred in part by a sense that Asia is beginning to emerge as a massive Net market. Still, there could well be a shakeout in the year 2000, and PacNet's going to feel the heat.